South Korea Goes From One Presidential Scandal to Another

Renewed scrutiny into the scandals of Lee Myung-bak could mean another South Korean ex-president facing jail time.

By Justin Fendos for The Diplomat

November 03, 2017

As we approach the one year anniversary of the massive protests that led to the ouster of ex-president Park Geun-hye, the ill deeds of another South Korean administration have been coming under close scrutiny. The administration of Park Geun-hye’s predecessor, Lee Myung-bak, who served as president from 2008 to 2013, is now facing its own corruption scandal.

Documents from the National Intelligence Service (NIS) released this September show that Lee’s administration, like Park’s, maintained a blacklist of artists and comedians who were openly critical of the administration. This list appears to have been used to influence art and broadcasting projects funded with public money, preventing at least 82 individuals from being hired through a variety of venues.

The blacklist was kept and maintained by the NIS as part of a larger campaign of subversive political activity, a campaign headed by then-NIS chief Won Sei-hoon. In addition to the blacklist, Won appears to have misused NIS resources to help pro-government conservative civic groups obtain financial support for political rallies and campaign activities. Some of this support was even used to operate a unit that faked public opinion on social media networks during the 2012 presidential election by posting favorable comments about Park Geun-hye and negative ones about then opposition candidate Moon Jae-in. At least 1.2 million tweets were revealed as having been posted in this effort.

Won also misused NIS resources to pressure media outlets to withhold negative commentary about the Lee Myung-bak administration, even authorizing secret surveillance of opposition political figures. Although it remains to be seen how much direct involvement ex-President Lee had in these activities, the activities themselves have been confirmed and proven, resulting in Won’s conviction and imprisonment.

Allegations of illegally influencing an election are not the only charges to have been directed at Lee in recent months. The NIS scandal has also renewed interest and scrutiny in the Four Major Rivers Restoration Project (FMRRP) that Lee Myung-bak’s administration implemented from 2009 to 2011. The FMRRP was a massive infrastructure project costing about $20 billion designed to clean up rivers, reduce floods and droughts, and develop riverside leisure facilities. The FMRRP resulted in the construction of 16 weirs, five dams, and 96 reservoirs but was frequently dogged by fierce criticism from both environmentalists and political activists.

Environmentalists were upset about the severe damage done to natural habitats. Algae blooms, in particular, were a serious issue with many of the new constructions. These blooms caused damage to aquatic life by depriving fish and other creatures of oxygen. In the southern part of the country, these blooms were nicknamed “green algae lattes” because of their frothy prevalence. Despite repeated calls to dismantle the offending dams and weirs and restore natural conditions, no such steps were taken.

Political activists, on the other hand, criticized the FMRRP for the hasty and misleading way in which it was implemented. Like similar infrastructure projects under the Park administration, the procedure for bidding and awarding different parts of the FMRRP was opaque, with financial approval occurring at abnormal speeds. The auditing of expenses was also criticized as being too lenient and opaque. Many critics openly questioned whether the FMRRP was a way for Lee to make up for his failed bid to construct the Grand Korean Waterway (GKW).

The GKW was one of Lee’s campaign promises. An idea born during the height of Korean maritime trading strength, the GKW was a massive infrastructure project that proposed to expand development of Korean rivers as trade conduits, making them accessible to mega container ships, presumably enhancing the efficiency of transportation. This project was roundly criticized and eventually abandoned but many critics viewed the FMRRP as Lee’s replacement, presumably to appease industrial interests that may have supported him during his presidential campaign.

In 2013, a report released by the Board of Audit and Inspection of Korea (BAIK) reaffirmed the idea that the FMRRP was a project initiated and implemented with direct, personal guidance from Lee. The BAIK report confirmed that Lee was essentially the only one pushing for the project, even lying publicly about some of the justifications for it. For example, one of these justifications was the idea that South Korea had been deemed by the UN as a “water shortage” country. Such a categorization had never taken place. In May of this year, President Moon Jae-in authorized a full audit of the FMRRP, the results of which have yet to be released.

Even before becoming president, Lee Myung-bak was no stranger to scandals. The most infamous of these was the BBK scandal. Following a violation of election laws in 1996, Lee, then a member of parliament, resigned from office and served as a guest researcher at George Washington University. It was during this time that he began working with one Kim Kyung-joon.

Kim was the director of an investment firm called BBK. It is believed that Lee helped Kim manipulate stock prices by creating shell companies and spreading false rumors about the pending acquisition of these companies by foreign investors. The rumors helped inflate stock values significantly, resulting in gains worth about $30 billion that were embezzled through subsidiaries later found to be owned by Lee and Kim. Despite allegations and lawsuits filed by a variety of Korean investors on the losing end, the charges were initially dismissed due to “a lack of evidence.”

In the run-up to the 2007 presidential election, allegations about BBK resurfaced to harass Lee’s campaign. Kim was arrested and imprisoned and some evidence even surfaced to prove Lee had financial interests in BBK and other companies involved in the embezzlement. Yet, once Lee took office, no additional charges were filed. Kim, on the other hand, was subsequently sentenced to eight years in prison.

Kim’s prison sentence concluded in March of this year, resulting in his release and immediate deportation (he is a U.S. citizen). Upon arriving in the United States, Kim vowed to help reveal Lee’s involvement in BBK, saying, “When it comes to the BBK scandal, people think I am guilty, but I am not. In fact, I have won many legal cases related to this scandal. It was the fault of the then ruling party and the real beneficiary was the Lee Myung-bak administration.” This week, Korean prosecutors revealed they have since reopened the case and were probing Lee’s involvement in the scandal, making it more and more likely that a second president may join Park Geun-hye in facing imprisonment in the near future.

Justin Fendos is a professor at Dongseo University in South Korea and the associate director of the Tan School at Fudan University in Shanghai. He is a regular contributor for the Korea Herald.